Watchdog urged to probe local distributors blocking online sales

Rachel Wells

THERE are growing calls for Australia's competition watchdog to conduct an inquiry into local apparel distributors who are preventing overseas suppliers from selling their products to Australian consumers on international websites or instructing them to increase their web prices.

The calls come after The Age last week revealed that a growing number of Australian fashion importers and wholesalers are reaching agreements with international brands to lift prices or cease shipping here.

Choice spokeswoman Ingrid Just yesterday urged the Australian Competition and Consumer Commission to ''have a closer look'' at the practice.

''With the growth in online shopping and these emerging uncompetitive practices, I think it's important that the ACCC remains vigilant in addressing these activities,'' she said. ''

Last month, Communications Minister Stephen Conroy announced a parliamentary inquiry into why Australians pay significantly more for software and music downloads, where transport costs cannot be the reason. Ms Just said the inquiry should be extended to the entire online retail sector.

Meanwhile, former ACCC commissioner Stephen King, a professor in economics at Monash University, said the practices described by The Age appear to contravene competition laws by way of price fixing or resale price maintenance. He said he would be surprised if the ACCC did not investigate.

The ACCC has refused to confirm whether it will look into the practices, despite saying they could ''raise concerns under competition provisions''.

In the meantime, however, Australian shoppers are finding new ways to get around the shipping bans.

Cosmo McIntyre, who runs FetchUSA.com.au which purchases products on behalf of consumers from overseas websites that don't ship to Australia, by using a US postal address and credit card, says business has increased 30 per cent this year. ''Consumers are smart, and so if all of a sudden they can't buy a particular product online because they have an Australian address, then they'll come to me,'' he says.

Carolina Tillett who runs freight-forwarding company Price USA, where shoppers can save up to 80 per cent on some items, says her orders have increased 100 per cent since a year ago. ''Once shoppers get used to such big savings on a product then they will find ways to keep getting them.''

For example, she says, when popular American sportswear site Eastbay stopped shipping some Nike products to Australia last year she saw a huge spike in demand for Nike shoes.

American iTunes cards, allowing Australians to download music and games from the American iTunes store for up to 50 per cent less, are popular, said Ms Tillett, as are gift cards from the American Amazon store.

''It means consumers can get new-release books sooner, as well as make significant savings on e-books,'' she said.

336 comments

I saw a quote from the Australian Ikea manager 'explaining' why their item are significantly marked up in Australia and his only response was that they are competitive in the Australian market. So what he is saying is that because Australians have always been massively ripped off on consumer goods it as acceptable to continue to rip us off but hey we're ripping you off slightly less than the other guys.

Commenter

Ali

Location

Melbourne

Date and time

May 17, 2012, 8:09AM

A company is duty-bound to get the best price possible for its goods, so if Australians willingly pay more for IKEA stuff than Americans do, that's our fault for being complaisant, not IKEA's for charging what the Australian market will bear. The same no doubt applies to Apple, Samsung and so on.

The fix is exactly what's happening - take our business elsewhere, thanks to the 'net. IOW this problem will fix itself, if we're active and informed consumers. If only we'd do that with banks.

Commenter

AndrewT

Date and time

May 17, 2012, 8:22AM

People have been able to afford the prices of the Australian market because their salaries are higher. Minimum wage in the USA is $6/ hr, not $14 or $15 or whatever it is here, then the difference is skilled job salaries grows between the two countries.

It's not right, but it lets Aussies live the good life.

Commenter

SEM

Location

Melbourne

Date and time

May 17, 2012, 8:23AM

Agree, Ali, and that practice worked 15-20 years ago before the internet and before consumers realised exactly how much they were being ripped off. I remember working at Grace Bros when I was at uni, and saw the mark-ups they had on goods which in some cases were up to 500% (sporting goods). I recently went to the US and bought a pair of Asics shoes for $100 at Foot Locker in NYC (RRP, not a sale price). The exact shoe at Athlete's Foot is $190. Is it any wonder we are sick of being ripped off. I also agree with Pete, I also feel for the little retailers, but unfortunately, that's what competition does -- it drives out the inefficient.

Commenter

CeePee

Date and time

May 17, 2012, 8:28AM

I bought a small purple wardrobe from ikea "scratch and dent" (seconds) section. It was marked down to $199 from $349, so we bought it.

When i got home I checked the US Ikea price for the same item, not on special: $169

That investigation into whether or not apple might be charging itunes users 10% more for digital software should look at why Ikea is allowed to build a giant store next to the airport then charge double for everything.

Commenter

ikearip

Location

sydney

Date and time

May 17, 2012, 8:33AM

It would be interesting to check IKEA's local profits to see if there is such a massive profit being made and hence substantial tax paid on those profits (for good reason - global companies always talk about the people they employ, not the taxes that they pay). Too often they transfer price the profits out of countries such as Australia. More needs to be done to investigate the obvious rorts that happen here and are passed off as due to higher wages and rents etc. How can amazon Uk sell Epson printer pink for half the price here. We can take charge and buy overseas but to simply accept higher prices being thrust on our domestic market is crazy.

Commenter

Edward

Location

Melb

Date and time

May 17, 2012, 9:14AM

I am an online shopper. I am a local shopper too.I try to support local businesses where it suits me. My biggest gripe with them is customer service. If I am going to get crap customer service, then I buy online. If customer service is good, then I will buy from the store. Simple.

Commenter

Mummie

Location

Brisbane

Date and time

May 17, 2012, 9:16AM

I got a table from IKEA for $9. It was white gloss, classy and holds my morning coffee with style. I couldn't imagine it being any cheaper than $9.

Commenter

Those Swedes!

Location

QLD

Date and time

May 17, 2012, 9:24AM

Don't worry about IKEA ripping us off look at LEGO. They charge almost double the US price. I've only found one aus site that comes close shopforme.com.au but other than that we are getting ripped!

Commenter

MRLEGO

Location

Melb

Date and time

May 17, 2012, 9:39AM

SEM and onebadpig are correct. People often forget how much we get paid in comparison to overseas economies. The strength of our local companies are what has allowed this.

The increase in sending our incomes overseas will rapidly magnify the already very real issues of offshoring employment and continue to wipe out whole industries. We will start to see a true balance between income and expenditure as the global economy continues to erode borders and levels playing fields.

To all the online shoppers, have a good hard look at your own employment or business and impartially factor in it's survival in this type of economy.